K2M Group (NASDAQ: KTWO) and Invacare (NYSE:IVC) are both small-cap medical equipment, supplies & distribution – nec companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, dividends, institutional ownership, earnings, profitability and valuation.
Volatility and Risk
K2M Group has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Invacare has a beta of 2.44, meaning that its share price is 144% more volatile than the S&P 500.
Invacare pays an annual dividend of $0.05 per share and has a dividend yield of 0.3%. K2M Group does not pay a dividend. Invacare pays out -2.1% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares K2M Group and Invacare’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|K2M Group||$236.63 million||3.26||-$41.66 million||($0.96)||-18.56|
|Invacare||$1.05 billion||0.64||-$42.85 million||($2.35)||-7.26|
K2M Group has higher earnings, but lower revenue than Invacare. K2M Group is trading at a lower price-to-earnings ratio than Invacare, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and recommmendations for K2M Group and Invacare, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
K2M Group presently has a consensus target price of $25.13, suggesting a potential upside of 40.99%. Invacare has a consensus target price of $15.00, suggesting a potential downside of 12.02%. Given K2M Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe K2M Group is more favorable than Invacare.
Insider & Institutional Ownership
99.2% of K2M Group shares are owned by institutional investors. Comparatively, 94.7% of Invacare shares are owned by institutional investors. 5.8% of K2M Group shares are owned by insiders. Comparatively, 3.2% of Invacare shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares K2M Group and Invacare’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
K2M Group beats Invacare on 9 of the 16 factors compared between the two stocks.
About K2M Group
K2M Group Holdings, Inc. is a medical device company focused on designing, developing and commercializing spine and minimally invasive technologies and techniques. The Company’s solutions are focused on achieving three-dimensional Total Body Balance. Its spine products are used by spine surgeons to treat spinal pathologies, such as deformity (primarily scoliosis), trauma and tumor. Its products consist of implants, disposables and instruments, which are marketed and sold primarily to hospitals for use by spine surgeons. As of December 31, 2016, its product portfolio consisted of 83 product lines that are used in complex spine, minimally invasive surgery (MIS) and degenerative surgeries. Its technologies include EVEREST, MESA, Rail 4D, Quicket Deformity, CASCADIA, CAPRI, SERENGETI, RAVINE and tifix. Its degenerative spine technologies are used to treat degenerative spine disorders and include products, such as cervical, thoracic and lumbar spinal fusion devices and interbody devices.
Invacare Corporation is a manufacturer and distributor for medical equipment used in non-acute care settings. The Company’s geographical segments are Europe; North America, which includes North America/Home Medical Equipment (North America/HME) and Institutional Products Group (IPG) segments, and Asia/Pacific. The Company manufactures and distributes three product categories: mobility and seating, lifestyle and respiratory therapy. It provides medical device solutions for congenital (cerebral palsy, muscular dystrophy and spina bifida), acquired (stroke, spinal cord injury, traumatic brain injury, post-acute recovery and pressure ulcers) and degenerative (amyotrophic lateral sclerosis, multiple sclerosis, chronic obstructive pulmonary disease (COPD), elderly and bariatric) ailments. The Company sells its products to home medical equipment providers with retail and e-commerce channels, residential living operators, distributors and government health services.
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